Habitat and species richness in drylands are affected by the dynamics of a few key species, termed "ecosystem engineers." These species modulate the landscape and redistribute the water resources so as to allow the introduction of other species. A mathematical model is developed for a pair of ecosystem engineers commonly found in drylands: plants forming vegetation patterns and cyanobacteria forming soil crusts. The model highlights conditions for habitat creation and for high habitat richness, and suggests a novel mechanism for species loss events as a result of environmental changes.